Taxes

The Katy area and the great state of Texas have created dynamic and growing economies with the help of a pro-business tax structure and pro-business climate. Some key features of the tax and business environment include: There is no state income tax on persons or businesses, no local income or occupational taxes on persons or businesses, a low franchise tax, strong tort reform law, Employment-At-Will and Right-to-Work laws.

Franchise Tax

The State of Texas franchise tax is a privilege tax imposed on each taxable entity formed or organized in Texas or doing business in Texas. State of Texas franchise tax rates are: 0.75% for most entities; 0.375%  for qualifying wholesalers and retailers; and 0.331% for those entities with $20 million or less in annualized total revenue using the "E-Z Computation."

Ad Valorem (Property) Tax

Ad Valorem or property taxes are assessed at the local level on real and personal property for various taxing districts. Property is assessed per $100 valuation at 100% by County Appraisal Districts annually, unless otherwise noted. Numerous property tax exemptions are available for qualifying properties. Below are some property tax rates for various districts and for selected business areas.

Ad Valorem (Property) Tax Rates - 2016
Taxing District Rate ($) - 2018
Katy ISD 1.5166
City of Katy 0.58672
City of Fulshear 0.161631
City of Houston 0.601120
Fort Bend County 0.48600
Harris County 0.41923
Waller County 0.695825

Below are some examples of business park / district total property tax rates per $100 valuation.

Tax Rate for Area Business Parks / Districts
Location County Tax Rate ($) Year
Katy Mills     2015
Katy Ranch Crossing Harris 3.211002 2015
LaCenterra Fort Bend 2.5556 2015
Mason Creek Corporate Harris 2.727188 2015
Park West Business Park Harris 2.641002 2015
West Ten Business Park Waller/Fort Bend 3.569388 2015
Ten West Crossing Business Park Harris 2.741002 2015
Grand Crossing Harris 2.661002 2015
Grand Parkway Industrial Harris 2.241002 2015
Energy Park West Harris 2.251502 2015

Sales and Use Tax
Sales and use tax rates for the City of Katy, City of Fulshear and City of Houston are one percent (1%). Special purpose districts such as Metro have a rate of one percent (1%). The State sales rate is 6.25%. The maximum total sales tax for any area in Texas is 8.25%. Numerous sales tax exemptions may be available for qualifying economic development projects.

Fuels Tax
The Texas Fuels Tax is $0.20 per gallon. There is no local fuel tax.

Unemployment Insurance(UI)
Companies employing one or more employees may be required to pay state unemployment tax.  A minimum of six quarters is required to obtain an experience rating.  Starting rate in the State of Texas 2.7% and is based on the first $9,000 in earnings.

Employer Contribution Rates (Estimated 2015)
Average UI tax rate as a percent of taxable wages, Texas 2.58%
Average UI tax rate as a percent of taxable wages, U.S. 2.91%
Average UI tax rate as a percent of total wages, Texas 0.52%
Average UI tax rate as a percent of total wages, U.S. 0.72%
Source: U.S. ETA (Employee & Training Administration, 2015)  

Workers Compensation Insurance
Options for Workers Compensation include self-insurance, the state operated Texas Workers Compensation Insurance Fund, or a licensed private insurance company.

Workers Compensation Costs (Program)
Costs for Employees as Percent of Covered Wages  
Texas (2013) 0.80%
U.S. (2013) 1.34%
Source: Texas Workforce Commission, 2015


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